The leader in organic milk is gaining a stronghold in organic produce.

WhiteWave Foods, the locally bred company that owns brands such as Horizon Organic and Silk, plans to acquire organic produce company Earthbound Farm for $600 million in cash, officials announced Monday.

The transaction represents the first acquisition for WhiteWave (NYSE: WWAV) since it became a publicly traded company and since its spinoff from dairy giant Dean Foods Co.

Based in San Juan Bautista, Calif., Earthbound Farm sells a variety of organic products including salads, dried fruits and frozen fruits and vegetables. WhiteWave is acquiring Earthbound Farm from its existing shareholders, which are led by Kainos Capital and the company's founders, Drew and Myra Goodman.

The produce segment was a "natural extension" for WhiteWave, which holds leadership positions in categories such as organic milk, plant-based food and beverages and coffee creamers, said Molly Keveney, a WhiteWave spokeswoman. WhiteWave's brands include Silk, International Delight, Horizon Organic, Land O'Lakes and Alpro.

"Really the acquisition of Earthbound Farm is consistent with WhiteWave's strategy of investing in scaleable businesses that are really better for you, better for the planet," she said.

Earthbound Farm is expected to log more than $500 million in sales this year and, excluding transaction costs, is projected to add about 7 cents per share to WhiteWave Foods' earnings in 2014, officials said.

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WhiteWave closed out 2012 with a net income of $113.7 million and revenue of $2.3 billion.

If the acquisition closes as expected in the first quarter of next year, WhiteWave will operate Earthbound Farm as a separate business unit based in San Juan Bautista. WhiteWave does not intend to make management changes at Earthbound Farm, which has 1,200 employees; a 332,000-square-foot, certified-organic processing facility in California; 200 farmer partners; and 50,000 crop acres, Keveney said.

"We think Earthbound Farm presents very nice growth and innovation opportunities," Keveney said. "Fresh foods are one of the most attractive, emerging trends in the food industry."

As a result of the deal, William B. Chappell Jr., an analyst who covers WhiteWave for SunTrust Robinson Humphrey, raised his firm's earnings-per-share estimates for WhiteWave to 95 cents and $1.26 for 2014 and 2015, respectively. SunTrust Robinson Humphrey, which holds a "buy" rating on WhiteWave, raised its price target to $27 per share from $25 per share, according to a research report released Monday afternoon.

The combination of the two organic firms appears a good fit but does carry some risk, Chappell wrote.

"(WhiteWave) is doubling its overall exposure (from 20 percent of sales to 40 percent) to the organic farm complex, which comes with weather, product quality and pricing challenges," he said. "We are not overly concerned about this added risk, but investors should understand that the new categories carry greater complexity/volatility than the plant-based beverage or International Delight businesses."

The transaction could be the first of several acquisitions for WhiteWave during the next few years, he said.

"(WhiteWave) management has a strong M&A background from its Suiza/Dean Foods days, and it can be more nimble about broadening its portfolio now that it is a completely separate entity," he said.

The deal would give WhiteWave significant positioning in the organic milk and organic produce categories -- the two primary "gateway" segments for consumers to try organic food items, Keveney said.

"The more people we can make aware of organic dairy and organic produce, the more aware they'll be of organic in general," she said.

The combination of two of the largest players in organic food is unique, said Marc Brush, editor in chief of the Nutrition Business Journal, a publication of Boulder-based New Hope Natural Media.

"We don't see a lot of large acquisitions like this in organic; there aren't that many big companies," Brush said. "It's unusual. I think we've seen a lot of acquisitions from outside the space -- more conventional, (consumer packaged goods firms). They seem to be very inquisitive around natural products."

Such a deal feels symbolic, he added. The transaction, in some senses, could represent a maturing of the organic industry, he said.

U.S. consumer sales of organic foods reached $26.3 billion in 2012, up 10.8 percent from 2011, according to Nutrition Business Journal data provided by Carla Ooyen, director of market intelligence for New Hope. Organic fresh produce -- including bulk and pre-packaged -- accounted for $9 billion of those sales and grew 13.0 percent from 2011, she said.

WhiteWave Foods will use borrowings under its existing credit facility to finance the acquisition. The company also intends to increase its credit facilities -- after making the necessary lender agreements -- by $500 million "to provide continued capacity for future growth," officials said in a news announcement.

Earlier this year, WhiteWave Foods completed its previously announced spinoff from dairy giant Dean Foods Co. and the company moved some of its corporate operations to an office in downtown Denver from Broomfield.

WhiteWave's Broomfield campus, where more than 450 people work, serves as the company's North American headquarters.

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